Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Sonos, Inc. (NASDAQ:SONO) due to its excellent fundamentals in more than one area. SONO is a company with impressive financial health as well as an optimistic growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Sonos here.
High growth potential with excellent balance sheet
SONO is an attractive stock for growth-seeking investors, with an expected earnings growth of 43% in the upcoming year underlying the notable 22% return on equity over the next few years leading up to 2022. SONO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that SONO manages its cash and cost levels well, which is an important determinant of the company’s health. SONO seems to have put its debt to good use, generating operating cash levels of 3.16x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Sonos, I've put together three essential aspects you should further examine:
- Historical Performance: What has SONO's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is SONO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SONO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SONO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.